Benton

Daily Digest

Analysis

Site Search

Examining Problems, and Solutions, for Journalism in the Age of Online Platforms

Examining Problems, and Solutions, for Journalism in the Age of Online Platforms

Submitted on March 1, 2019

Friday, March 1, 2019

Weekly Digest

Examining Problems, and Solutions, for Journalism in the Age of Online Platforms

You’re reading the Benton Foundation’s Weekly Digest, a recap of the biggest (or most overlooked) telecommunications stories of the week. This digest is delivered via e-mail each Friday.

Round-Up for the Week of February 25 - March 1, 2019

McBeath

On February 25, 2019, Free Press released Beyond Fixing Facebook.The authors, Timothy Karr and Craig Aaron, look beyond Facebook to address a deeper problem infecting the entire "attention economy": the abuse of targeted advertising. "[T]argeted advertising relies on data-harvesting regimes that individuals, groups and government actors have abused to promote malicious and false stories, incite racists and manipulate voters," they write. The report measures the rise of the online-platform business model against the fall of independent news reporting and calls for an economic realignment that recognizes the vital role noncommercial journalism plays in a democracy. "Our focus here is on showing how to make the economic engine powering these platforms more accountable to the public while addressing the crisis in journalism these companies have worsened."

The Damage Report

Karr and Aaron spend much of the report describing the various symptoms and problems of our new age of social media platforms driven by targeted advertising.

Too big not to fail

Along with Google, Facebook now controls nearly 70 percent of the U.S. online-advertising market. Facebook’s market capitalization has peaked above half-a-trillion dollars — approximately the gross domestic product of Sweden, if you’re scoring at home. And, perhaps, this has translated into platforms having too much control over our public discourse. Online platforms “now control what audiences see and who gets paid for their attention, and even what format and type of journalism flourishes,” according to 2017 research conducted by Columbia’s Tow Center for Digital Journalism.

A formula for manipulation

Some key takeaways from the report:

Social networks function by gathering people into like-minded groups and promoting to them the content that creates the strongest reaction. The platform then generates revenue by targeting ads that appeal to these finely targeted communities. Combine these two elements and you’ve created a billion-dollar formula for manipulation.

A business built on clickable metrics loads the news cycle with stories that scream the loudest at the expense of accuracy and depth. Less measurable outcomes, like whether an article inspires a person to get involved in their community or speak out against an injustice, aren’t part of the platforms’ calculus for promoting stories.

The attention economy has misaligned the flow of advertising money away from content with high social value.

The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.

‘Surveillance capitalism’

Harvard professor and coiner of the term “surveillance capitalism” Shoshana Zuboff was interviewed by Vox’s Kara Swisher last week. She explained the threat to democratic society posed by the “attention economy.”

Karr and Aaron discuss Zuboff and surveillance capitalism when they write:

The danger isn’t just Facebook’s or Google’s unwieldy scale but the multibillion-dollar revenue model on which online companies have built their businesses. It’s powered by a form of ‘surveillance capitalism,’ where digital platforms make money by profiling our activities online and then selling our attention to political actors, commercial advertisers and others.

This ad-targeting ecosystem benefits those that can vacuum up massive quantities of personal information. It includes social-media platforms, but is fueled by a hidden network of data brokers collecting and reselling our personal information.

These data merchants — and not Facebook users — “are Facebook’s true customers, whom it works hard to please,” writes techno-sociologist Zeynep Tufekci. “A business model based on vast data surveillance and charging clients to opaquely target users based on this kind of extensive profiling will inevitably be misused.”

Surveillance capitalism has evolved to suit the needs of those whose product is misinformation and maninpulation — not a good situation for the public's need for a product of accurate information. This business model is obviously not good for creating accurate, sustainable jouranlism. Karr tied the concept of surveillance capitalism to the fate of journalism in a blog post this week. He wrote:

For journalists it’s been a perfect storm. In the vortex of [massive newsroom layoffs] we see the world’s wealthiest companies getting rich from a system that hastens the spread of propaganda and misinformation. And it’s happening at a time when the journalism we most need to debunk these lies and hold those who spread them to account is in crisis.

The race to the bottom

Online-platform problems aren’t limited to the mismanagement and misuse of user data. Too much of the growing bucket of online-advertising money flows to malicious, sensationalist or just plain false content — and too little flows to valuable news and information.

The race to the bottom has not been good for valuable news, nor for valuable news creators. The Free Press report reminds us of the starting statistics of the widespread job losses in journalism:

Between the beginning of 2004 (the year Facebook launched) and the end of 2016, the number of U.S. newspaper employees dropped by more than half — from 375,000 to about 173,000.

A 2018 study from researchers at the University of North Carolina looked at the emergence of “news deserts” — regions that lack local news outlets — and found that the U.S. has lost about 20 percent of its newspapers since 2004, leaving at least 900 communities without local news resources.

Between 2003 and 2014, the number of full-time newspaper reporters covering statehouses in the United States fell 35 percent.

“The faltering of newspapers, the consolidation of TV and radio, and the rising power of social media platforms are not just commercial issues driven by the market. They are democratic issues with profound implications for our communities.” -- Josh Stearns, Free Press alum

But Karr and Aaron note that journalism has struggled for other reasons:

[P]latforms alone aren’t to blame for journalism’s struggles. Many of the media industry’s worst wounds have been self-inflicted: Consolidation has shuttered newsrooms nationwide, and many traditional news outlets have failed to adapt their businesses to an online environment or to stay connected to the communities they serve.

Confronting the News Crisis

"The status quo is unsustainable, and we need to consider alternatives that actually meet our societal and democratic needs," write Karr and Aaron. They offer some alternatives.

Taxing Targeted Advertising to Fund Public Interest Media

At the heart of the report is a call to address the underlying business models of platforms and create a new, multibillion-dollar Public Interest Media Endowment, funded by taxing the purveyors of targeted advertising.

Rather than attempting to police [social media] content, the endowment would direct tax revenues to fund independent and noncommercial news outlets. The money from the Public Interest Media Endowment could be spent in ways that preserve editorial independence and protect grant recipients from political interference. The funding could support local-news startups, investigative reporting, civic-engagement initiatives, public interest journalism and the creation of alternative platforms. It should emphasize operations of, by and for diverse and underserved communities.

The report provides a number of options for collecting tax revenues for the Public Interest Media Endowment. Each would generate approximately $2 billion annually:

A 2 percent targeted-ad tax on all online enterprises that earn more than $200 million in annual digital-ad revenues.

A lower tax rate levied on all advertising revenues, including offline placements, which increasingly draw on similar data profiles gleaned from online activity.

A tax equal to 1.5 percent of taxable income levied on any platform with an annual taxable income of $1 million or greater if more than 60 percent of such income is derived from the sale of advertisements presented to patrons or users.

Reinventing public-interest media

Erik Martin, former policy adviser at the White House Office of Science and Technology Policy, this week called for a “PBS for the Internet Age.” “Rather than let public broadcasters who have accrued so much public trust languish — or, worse, be co-opted by a tech industry that has a vast interest in how its portrayed — both our federal and state governments need to play a more active role in public media’s health and digital future,” he wrote.

He suggested Congress grant the Federal Communications Commission an updated mandate to guarantee that high-quality educational and informational public media is distributed on major social media platforms at limited or no cost to the public. Martin claimed there was precedent to do so: “In the ’90s, Congress passed the Children’s Television Act, which gave the FCC regulatory authority to require commercial TV broadcasters to air such content.”

Philanthropy and Media

We noticed a number of journalism-focused announcements from the philanthropic sector this week.

The News Impact Network, a project of the European Journalism Centre, unveiled the “News Impact Network Cookbook” — a collection of stories, tips, and recipes to innovate journalism, by journalists, for journalists.

The American Journalism Project launched a major effort to reinvigorate local news with $42 million in founding commitments. In February, the John S. and James L. Knight Foundation announced a $20 million, 5-year commitment to the American Journalism Project, and add ing to support from Arnold Ventures, Emerson Collective, Craig Newmark Philanthropies, The Facebook Journalism Project, and philanthropist Christopher Buck. The American Journalism Project “will support existing and emerging news organizations with grants and hands-on support to ensure their long-term sustainability through diverse revenue generation and modern technology operations. “

Conclusion

The Free Press report released this week offered some context and clarity into the abuses of targeted advertising, particularly as to the effect on journalism. The proposed solutions serve as a reminder that, although the situation is dire and requires urgent action, innovative ideas aimed at revitalzing the news and reinventing public-interest media are out there if we have the will to make them real.

We will do our best to capture the discourse around supporting public-interest journalism in the age of online platforms. You can follow along everyday in Headlines.

Benton, a non-profit, operating foundation, believes that communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities to bridge our divides. Our goal is to bring open, affordable, high-capacity broadband to all people in the U.S. to ensure a thriving democracy.